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A pandemic has hit the globe. People have locked themselves inside their homes due to fear of spread. World economy has hit rock bottom and so has the income of common man. Fear of losing the job or a dip in the income has left many worried especially the returning expats.

In these trying times, the first thing one should learn is to know how to manage money and to bring about a financial discipline in life.

• Keep an Emergency Fund

It is not about just expats, each and every person must maintain an emergency fund . It must be sufficient enough to cover the lifestyle expenses as well as EMI (equated monthly installments) payments of a family for a span of at least one year.

• No Unnecessary Expenses

Back out from anything that empties your pocket.

• No Long-Term Investment

Do not venture into any new long-term investments, be it insurance or equity. Liquidity is the key during this crisis.

• Continue Existing SIP, Insurance

Continue the existing SIP’s and insurance policies unless you are left with zero fund after the necessary expenses. Discontinuing the policies will result in losing the money paid.

• Avoid Quick Income Schemes

Do not fall into regular income offer traps in the form of business partnerships and other schemes. This is not the time to make such investments.

• No to New Traditional Insurance Policies

Say no to new insurance policies even if they come up with irresistible retirement plans and returns. Most of them have low liquidity and will at least take five years to initiate the returns.

• Manage your Expenses

Note down the monthly expenses and strike off the unnecessary ones. Maintain a discipline in financial matters so that you come out of this crisis unhurt.

• Review Existing Insurance

Review your insurance policies and make assessments regarding your term insurance, life insurance coverage, sum assured, health insurance and critical illness policy. Check whether these policies and its coverage meet the requirements of your dependents and family including ageing parents. If found insufficient, take corrective measures such as discontinuing the unnecessary ones.

• Manage your Debt

Restructure your debts which include renegotiating the interest rates of EM I’s if found higher. Combine the multiple loans and pay the interest together or reduce rates if possible. Seek the help of an expert in realigning the EM I’s and interest rates to make it a better payment structure.

• Find Part Time Job

Find a part time job if you are on a vacation or have resigned. Try working online if you are a skilled worker. Utilize the time to the fullest by searching for one online or developing a skill set which might add value to your resume.

• Build your Network

If you are in constant fear of losing the job, utilise the time to find a network who could help fetch a job.

• Goal Based Investing

Assess whether your investments are goal based apart from your emergency fund and insurance.

• Plan your Retirement

Check whether you have a retirement plan. Identify the time of retirement and the goals to be achieved before retirement.

In these unpredictable times, maintaining a financial discipline financial  in life helps to come out of this crisis unhurt.

Emergency fund is a safety net which helps you move on with life when hit by life’s unforeseen events.

It could be anything – unemployment, unexpected medical contingencies, and repairs to your house or vehicle. So, irrespective of your profession and income, emergency fund is a must. Because uncertainties apply to all.

One must have excess fund for at least 3 to 6 months or a year and it should be adequate enough for the monthly lifestyle expenses of a family.

To have an emergency fund , one must identify the monthly expenses, asses your job and salary and keep contributing to the emergency fund on a regular basis.

Wondering how to find this excess money so that you can create one?

Let us discuss a few points.

1. Find Unnecessary Expenses and Stop

Strike off the unnecessary expenses like visiting restaurants and multiple subscriptions and reduce bad habits like smoking and consuming alcohol. Identify the money leakages and stop them.

2. Do Online Job

Use your additional skills to find online jobs which adds to the income. Job losses and pay cuts are making rounds. So, polish your skills which might fetch you another job or add value to your resume.

3. Automate Emergency Fund Investments

Once you identify the funds to be raised, automate the emergency fund account. This is much easier than contributing to it manually.

4. Use Liquid Fund over Savings Account

Move your funds in the savings account into liquefied mutual funds which fetches higher rate of interest. This interest is additional income which adds to the emergency fund. You can automate this account too. Liquefied mutual funds can be withdrawn immediately with some even having ATM cards.

5. Sell Unused Items

Sell those household items that are not in use. For instance, if you have furniture which remains unused, they can be sold in websites like OLX. This too adds to the emergency fund.

6. Renegotiate Loan Interest

Check whether the rates you pay for the loans are higher. If yes, correct them and try restructuring the loan. This helps to reduce your EMI and thus realign the interest. This saved money can be added to the emergency fund.

Tough times are ahead as businesses keep losing their revenue and as people face unemployment. So, secure yourself with an emergency fund so that you are not left to run from door to door for money.

Retirement planning is a gradual process as well as a multi step procedure. It includes identifying the time of retirement, finding the goals to be achieved before your D-day, evaluating the expenses and finding an income flow post retirement and giving a serious thought about your dependents.

Some would want an early retirement while others would follow the due course. No matter which group you belong to, go through this 10-step formula to make your retirement life a happy and contented one.

1. Know When You Want to Retire

Identifying the time of retirement is an important step. This helps you assess the years left in service and define the goals to be achieved before retirement.

2. Goals to Achieve Before and After Retirement

Define your goals  you wish to achieve before retirement. This can be your children’s education, marriage and additional goals such as paying off debts and constructing a house. Evaluate those goals which remain pending even after the retirement.

3. Total Cost of Retirement

Evaluate the cost of retirement. Calculate monthly expenses and identify the source of income post retirement. Identifying the fund required to meet these expenses and raising them must be one of your goals.

4. Your Income Flow Post Retirement

Calculate the source of your income post retirement. You may receive rent from residential or private property, revenue from businesses invested, dividend from share investment or any other kind of monthly or yearly income which is an income.

5. Evaluate Total Assets and Investment

Make a clear calculation of your assets and investments. Consolidate these investments and try realigning them. Do a re balancing and make it compliant to your risk profile and requirements.  Check whether these investments help you achieve your retirement goals.

6. Can I Invest Monthly Now

Now that you know the number of years left in service, identify a suitable SIP (systematic investment plan) to invest as this adds to the retirement fund.

7. Find Your Dependents Need

Find the requirements of your dependents and their retirement age. Check whether your children become independent before the retirement. Keep your insurance policies in check and irrespective of the state of your dependents, take a health insurance. This will avoid emptying your pocket in case of a medical contingency.

8. Fix Insurance Need

Make sure you have a suitable life insurance policy. In case the earning member passes away, it ensures the family gets compensated with a lump sum amount which helps them move on in life. Check whether the sum assured is compliant with your requirements. If not, take corrective measures.

9. Find the Post Retirement Tax

You will have to pay tax for your additional income post retirement. Calculate the tax amount during retirement planning.

10. Create a Will Document

Make a will clearly mentioning the property and the name of the recipient. Seek the help of a legal expert to follow proper legal procedures to make sure that the recipient receives it. In shares and mutual fund investments, even if a nominee is mentioned, a legal suit would be enough to stop it reaching the deserved. So, make sure you register the will.

A well-executed retirement plan helps you have a stress free retirement. So, if you have not started one, follow these tips and begin the journey.